Let’s face it: The residential phone line is on the verge of suffering the same fate as the 8-track tape. Anyone who doesn’t know what an 8-track tape is most assuredly uses a cell phone—and only a cell phone—to communicate. Email takes too long. And younger generations don’t even use the actual phone part of their cell phones.
The reality is that if you want to communicate with a very large segment of the U.S. population, you have to text. This explains why everyone is doing it. Doctors, dentists, veterinary practices, hair salons, airlines, car dealerships—businesses that make appointments—all send text reminders. Schools notify parents of school cancellations by texts. Hotels offer “virtual concierge” services entirely by texts. Retailers offer special discounts via texts. Should your business jump on the text message bandwagon? Maybe. The reward is high, but so is the risk.
In 1991, when cell phones were as big as boom boxes, Congress enacted the Telephone Consumer Protection Act (TCPA)1 to address abusive telemarketing practices. The TCPA includes a private right of action provision that provides for statutory damages to private litigants of $500 per violation and up to $1,500 per willful violation. Because of the availability of statutory damages, TCPA claims often are brought as putative class actions. In that context, a business that made 100,000 non-compliant calls faces the prospect of $50-$150 million in damages. It’s no wonder that the TCPA is a favorite of the plaintiffs’ class action bar.
TCPA and Text Messages
Although directed at marketing calls and faxes, one provision of the TCPA applies to virtually all calls to wireless numbers. It makes it unlawful to make any call (unless made for any emergency purpose or with the “prior express consent of the called party”) using “an automatic telephone dialing system” or an artificial or prerecorded voice “to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States.”2
That’s a mouthful, so let’s break it down. In general, a violation of this provision requires: (1) a call to a telephone number assigned to a cellular telephone service; (2) made using an automatic telephone dialing system or artificial or prerecorded voice; and (3) without the prior express consent of the called party.
Is a text message a “call” to a cellular number for purposes of the TCPA? Although I strongly disagree, the Federal Communications Commission (FCC) said yes, and several courts have deferred to the FCC on this issue.
Is the system you would use to send texts an “automatic telephone dialing system” (often referred to as an ATDS or autodialer)? That question unfortunately does not have a simple answer.3 If you plan to have your employees use their own cell phones to type in and send individual text messages from those phones, then you should be outside the scope of the TCPA (although maybe not certain state prohibitions). If you plan to utilize a commercial texting platform or API to send identical messages to thousands of cell phone numbers at the same time, then plaintiffs would argue you were using an autodialer, and whether a court would agree would likely need to be determined after discovery on summary judgment. In other words, even though in my view no texting platform is an “automatic telephone dialing system,” because each system is different, this is an issue that generally has to be litigated.
The actual statutory definition of “automatic telephone dialing system” is very narrow and on its face does not cover most, if not all texting platforms:
The term automatic telephone dialing system means equipment which has the capacity: (a) to store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.4
But the FCC has made statements in various orders over the years that have led some courts to ignore the “using a random or sequential number generator” limitation. Just last week the D.C. Circuit rejected these FCC interpretations as well as one from 2015 that would have applied to essentially all computerized system, including cell phones.5 (Visit our On-Demand Learning Portal for an archive presentation discussing the recent ruling.) Despite the D.C. Circuit’s very helpful opinion, there remains a lack of uniformity in the courts as to the required functionalities of an autodialer, leaving plaintiffs and defendants to argue about whether any particular text messaging system is or is not an “automatic telephone dialing system.”
3. How do I get the prior express consent of the called party? Once again, the FCC has made the answer to this question unnecessarily complicated.
For many years the law was that consent could be obtained through various means. It could be oral; it could be in writing; it could be through a text message call to action. Even the provision of a cellphone number in a context where the consumer would expect to be called was deemed adequate consent. Then the FCC adopted new regulations that distinguish between calls that introduce an advertisement or amount to telemarketing, on one hand, and those that are purely informational, on the other. The consent rules remain the same for purely informational calls, but effective October 16, 2013, with limited exceptions, consent for marketing/advertising calls require “prior express written consent,” now defined as:
An agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisement or telemarketing messages to be delivered.
(i) The written agreement shall include a clear and conspicuous disclosure informing the person signing that:
(A) By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and
(B) The person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.
(ii) The term “signature” shall include an electronic or digital form of signature, to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law.6
This clear and conspicuous agreement is not so hard to obtain if you collect consumer information via a webform. It’s much harder (although not impossible) to obtain via text message, a recorded telephone conversation, or by asking a consumer at a retail checkout desk if they want to sign up for special text offers.
Even if you obtain proper consent, there still is risk of TCPA liability. That’s because cell phone numbers are turned in and reassigned all the time. Some courts have concluded that “the prior express consent of the called party” means the prior express consent of the person actually called. If that’s so, then there is risk of a TCPA lawsuit any time a person who gave consent changes cell phone numbers and the old number is reassigned to a new user. Acknowledging this problem, the FCC has issued two notices of proposed rulemaking to consider a database of reassigned cell phone numbers, similar to the Do Not Call Registry, that businesses could use to try to avoid accidentally calling or texting a reassigned cell phone number. The FCC is even considering a TCPA safe harbor for entities that utilize the database. But for the time being, even companies that obtain prior express written consent to send text messages, with all the required disclosures, are at risk of TCPA litigation.
In sum, while the need for businesses to communicate with consumers by text message is great, so are the legal risks. Many of those risks can be mitigated or eliminated entirely through compliance strategies. Others hopefully will be eliminated as the courts and the FCC continue addressing the TCPA. In the meantime, whether to text or not to text is a business decision that should take into account the legal risks and the ways to minimize them.
1 47 U.S.C. § 227
2 Id. § 227(b)(1)(A)(3).
3 Some plaintiffs’ lawyers have argued that text messages are “artificial or prerecorded voice” calls, so they are subject to the TCPA even if no autodialer is used. Multiple courts have rejected that argument. Some states, however, prohibit advertising texts with limited exceptions, regardless of the nature of the equipment used to send them.
4 47 U.S.C. § 227(a)(1).
5 ACA Int’l v. FCC, No. 15-1211 (D.C. Cir. March 16, 2018).
6 47 C.F.R. 64.1200(f)(8).